Correlation Between Ford and TELEFO

Can any of the company-specific risk be diversified away by investing in both Ford and TELEFO at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Ford and TELEFO into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ford Motor and TELEFO 495 17 JUL 30, you can compare the effects of market volatilities on Ford and TELEFO and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Ford with a short position of TELEFO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ford and TELEFO.

Diversification Opportunities for Ford and TELEFO

-0.72

Correlation Coefficient

Ford  TELEFO

Pay attention - limited upside

The 3 months correlation between Ford and TELEFO is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ford Motor and TELEFO 495 17 JUL 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELEFO 495 17 and Ford is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Ford Motor are associated (or correlated) with TELEFO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TELEFO 495 17 has no effect on the direction of Ford i.e., Ford and TELEFO go up and down completely randomly.

Pair Corralation between Ford and TELEFO

Taking into account the 90-day investment horizon Ford Motor is expected to generate 0.31 times more return on investment than TELEFO. However, Ford Motor is 3.27 times less risky than TELEFO. It trades about 0.04 of its potential returns per unit of risk. TELEFO 495 17 JUL 30 is currently generating about -0.05 per unit of risk. If you would invest  1,007  in Ford Motor on October 27, 2024 and sell it today you would earn a total of  9.00  from holding Ford Motor or generate 0.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	31.58%
Values	Daily Returns

Ford Motor  vs.  TELEFO 495 17 JUL 30

Ford Motor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ford Motor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

TELEFO 495 17

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TELEFO 495 17 JUL 30 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for TELEFO 495 17 JUL 30 investors.

Pair Trading with Ford and TELEFO

The main advantage of trading using opposite Ford and TELEFO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ford position performs unexpectedly, TELEFO can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in TELEFO will offset losses from the drop in TELEFO's long position.

The idea behind Ford Motor and TELEFO 495 17 JUL 30 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.